| --- | --- | |----------------------------------------------------------|----------------| | | | | Teekay Tankers Second Quarter 2022 Earnings Presentation | August 4, 2022 | Forward Looking Statement This presentation contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including, among other things, statements regarding: the Company's expectations r ...

Financial Data and Key Metrics Changes - Teekay Tankers generated total adjusted EBITDA of approximately $58 million in Q2 2022, an increase of approximately $41 million from Q1 2022 [7] - The company reported an adjusted net income of nearly $26 million or $0.76 per share during Q2 2022, improving from an adjusted net loss of $14 million or $0.41 per share in the prior quarter [7] Business Line Data and Key Metrics Changes - The improved results were primarily due to higher spot tanker rates, with 98% of the fleet trading in the spot market, allowing the company to maximize results in the strengthening tanker market environment [8][9] - The average spot tanker rates in Q2 2022 were significantly higher both quarter-on-quarter and year-on-year, indicating a market recovery [12] Market Data and Key Metrics Changes - The tanker trade patterns have changed significantly since the start of 2022, benefiting Aframax and Suezmax tankers due to reduced short-haul exports of Russian crude oil to Europe [16][18] - Midsize tanker demand is projected to grow by approximately 7% in 2022 and by a further 5% in 2023, outpacing projected fleet growth of around 3% and 0% in the same years [21] Company Strategy and Development Direction - The company aims to reduce balance sheet leverage and strengthen its financial position to support business operations and capitalize on future opportunities [28][29] - Teekay Tankers is focused on disciplined fleet renewal and will not make significant acquisitions at the top of the market, preferring to enjoy strong cash flows from the existing fleet [42][43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the mid-sized tanker market in both the short-term and coming years, citing strong fundamentals and expected cash flow generation [29][60] - The outlook for tanker fleet supply remains positive due to historic low levels of tanker orders and an aging global fleet, with expectations of zero fleet growth in 2023 and negative growth in 2024 and 2025 [24][84] Other Important Information - The company entered into an agreement to sell a 2005-built Aframax for approximately $25 million, allowing it to crystallize an $8 million gain [11] - The average spot rates for Suezmax and Aframax bookings in Q3 2022 to date have been approximately $29,600 and $35,600 per day, respectively, significantly higher than the rates in Q3 2021 [14][15] Q&A Session Summary Question: What is the target leverage level for Teekay Tankers? - Management aims to reduce net debt to capital to around 30%, similar to levels seen in 2020, before considering other uses of capital [36][38] Question: How does the company plan to modernize its fleet? - The company intends to be disciplined in fleet renewal and will not make significant acquisitions at the top of the market, focusing instead on cash flow from the existing fleet [42][43] Question: Will VLCCs benefit from changing trade patterns? - Management indicated that while mid-sized tankers have benefited, VLCCs may see increased demand as Chinese imports recover and long-haul movements resume [46][48] Question: What factors influence the decision to move from spot to charter rates? - There is no specific magic level; decisions are based on overall portfolio exposure and market conditions, with a focus on locking in compelling rates [71][72] Question: What is the outlook for tanker fleet growth? - The tanker delivery schedule is expected to remain low through 2025, providing confidence in low fleet growth expectations over the next two to three years [84]

Teekay Tankers Ltd. (NYSE:TNK) Q1 2022 Earnings Conference Call May 12, 2022 11:00 AM ET Company Participants Christian Waldegrave - Director of Research Kevin Mackay - President & CEO Stewart Andrade - CFO Conference Call Participants Jon Chappell - Evercore ISI Magnus Fyhr - H.C. Wainwright Ken Hoexter - Bank of America Chris Robertson - Jefferies Operator Good day, ladies and gentlemen. Welcome to the Teekay Tankers Ltd's First Quarter 2022 Earnings Results Conference Call. During the call, all participa ...

| --- | --- | |---------------------------------------------------------|--------------| | | | | | | | Teekay Tankers First Quarter 2022 Earnings Presentation | May 12, 2022 | Forward Looking Statement This presentation contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including, among other things, statements regarding: the Company's expectations r ...

PART I [Key Information](index=6&type=section&id=Item%203.%20Key%20Information) The company's business is subject to principal risks including industry cyclicality, market volatility, and potential PFIC tax classification [Risk Factors](index=6&type=section&id=Risk%20Factors) Significant risks arise from tanker industry cyclicality, high operating costs, vessel value volatility, substantial debt, and regulatory compliance - The company's profitability is highly exposed to the volatile spot tanker market, which accounted for approximately **72.0% of net revenues in 2021** and **74.3% in 2020**[37](index=37&type=chunk) - A decline in the market value of tankers could trigger defaults on financing agreements, which require vessel value to outstanding loan/lease ratios of **100%-125%**[61](index=61&type=chunk) - The company faces significant capital expenditure for fleet renewal, as approximately **30% of its fleet is 15 years or older**[80](index=80&type=chunk) - Compliance with the IMO's Ballast Water Management Convention requires installing on-board treatment systems, estimated to cost approximately **$1.5 million per vessel** between 2022 and 2023[124](index=124&type=chunk)[222](index=222&type=chunk) - **Teekay Corporation holds a majority of the voting power** through a dual-class stock structure, limiting the influence of Class A common shareholders[128](index=128&type=chunk) [Tax Risks](index=27&type=section&id=Tax%20Risks) The primary tax risk involves potential classification as a Passive Foreign Investment Company (PFIC), which could adversely affect U.S. shareholders - A significant U.S. tax risk is the potential classification as a **Passive Foreign Investment Company (PFIC)**, which could have adverse tax consequences for U.S. shareholders[131](index=131&type=chunk) - The company is subject to taxes in various jurisdictions, and a successful challenge by a tax authority could **reduce cash available for distribution** to shareholders[133](index=133&type=chunk) [Information on the Company](index=28&type=section&id=Item%204.%20Information%20on%20the%20Company) The company's history, business operations, fleet composition, and strategic direction are detailed within a competitive and regulated industry context [History and Development of the Company](index=28&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Since its 2007 formation, the company has grown its fleet to 52 tankers with a total capacity of approximately 6.8 million dwt through strategic acquisitions - The company's fleet has expanded from nine owned Aframax tankers at its IPO in 2007 to a total of **52 tankers** by the end of 2021[135](index=135&type=chunk)[136](index=136&type=chunk) - Key strategic moves include the **2015 acquisition of its STS transfer business**, the **2017 acquisition of full ownership of Teekay Tanker Operations Ltd. (TTOL)**, and the **2017 merger with Tanker Investments Ltd. (TIL)**[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) [Business Overview](index=28&type=section&id=B.%20Business%20Overview) The company owns and operates oil tankers, employing a mixed chartering strategy and leveraging its relationship with Teekay Corporation for operational expertise Fleet Composition as of December 31, 2021 | Vessel Type | Owned and Leased | Chartered-in | Total | | :--- | :--- | :--- | :--- | | **Fixed-rate:** | | | | | Aframax Tankers | 3 | — | 3 | | **Spot-rate:** | | | | | Suezmax Tankers | 26 | — | 26 | | Aframax Tankers | 10 | 2 | 12 | | LR2 Product Tankers | 9 | 1 | 10 | | VLCC Tanker (50% JV) | 1 | — | 1 | | **Total Tanker Fleet** | **49** | **3** | **52** | | Ship-to-Ship Support Vessels | — | 2 | 2 | | **Total Fleet** | **49** | **5** | **54** | - The company's business strategies focus on **accretive fleet expansion**, tactical management of its charter mix (spot, fixed-rate, FSL), and maintaining high standards for customer service, safety, and quality[163](index=163&type=chunk) - The tanker industry is highly cyclical; as of December 31, 2021, the world Suezmax fleet consisted of **598 vessels** with 50 on order, and the Aframax fleet had **672 vessels** with 53 on order[184](index=184&type=chunk) - The company's operations are subject to extensive environmental regulations, including the **IMO's global 0.50% sulfur cap** on fuel oil and ballast water management rules, requiring significant compliance efforts and capital expenditure[217](index=217&type=chunk)[222](index=222&type=chunk) [Organizational Structure](index=48&type=section&id=C.%20Organizational%20Structure) Teekay Corporation is the controlling shareholder, holding a 54.7% voting interest through a dual-class stock structure as of December 31, 2021 - **Teekay Corporation controls Teekay Tankers Ltd. with a 54.7% voting interest** as of December 31, 2021, achieved through ownership of all Class B common stock and approximately 5.5 million shares of Class A common stock[268](index=268&type=chunk) [Taxation of the Company](index=48&type=section&id=E.%20Taxation%20of%20the%20Company) The company believes it qualifies for the Section 883 Exemption from U.S. federal income tax on its international shipping income - The company believes it qualifies for the **Section 883 Exemption**, which exempts its U.S. Source International Transportation Gross Income from U.S. federal income tax[277](index=277&type=chunk)[279](index=279&type=chunk) - If the Section 883 Exemption did not apply, the company estimates its U.S. federal income tax for 2021 would have been approximately **$5.6 million**, based on a 4% gross basis tax[284](index=284&type=chunk) [Operating and Financial Review and Prospects](index=51&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) Financial performance declined significantly in 2021 due to weak spot tanker rates, leading to a net loss and reduced liquidity [Significant Developments in 2021 and Early 2022](index=51&type=section&id=Significant%20Developments%20in%202021%20and%20Early%202022) Key developments included weak tanker rates from the COVID-19 pandemic, active fleet management through vessel sales, and financing activities to bolster liquidity - The COVID-19 pandemic and OPEC+ oil supply cuts led to a **significant decline in spot tanker rates** since mid-May 2020, which continued to pressure earnings throughout 2021[293](index=293&type=chunk)[294](index=294&type=chunk) 2021 Vessel Sales | Transaction Date | Vessel Type | Number of Vessels | Total Price | | :--- | :--- | :--- | :--- | | February 2021 | Aframax | 2 | $32.0 million | | August 2021 | Aframax | 1 | $11.7 million | | November 2021 | Aframax | 1 | $13.0 million | - In 2021, the company repurchased eight tankers for a total of **$185.5 million** and completed new sale-leaseback financing transactions for six tankers for a total of **$141.7 million**[301](index=301&type=chunk)[302](index=302&type=chunk)[304](index=304&type=chunk)[305](index=305&type=chunk) - In March 2022, the company completed a **$177.3 million sale-leaseback financing transaction** for eight Suezmax tankers[306](index=306&type=chunk) [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Financial performance deteriorated significantly in 2021, with a net loss of $242.4 million compared to a net income of $87.3 million in 2020 Financial Performance Comparison (2021 vs. 2020) | Metric | 2021 (in thousands USD) | 2020 (in thousands USD) | | :--- | :--- | :--- | | Revenues | 542,367 | 886,434 | | (Loss) income from operations | (194,095) | 141,573 | | Net (loss) income | (242,372) | 87,317 | | Net revenues (Non-GAAP) | 227,246 | 589,209 | | Adjusted EBITDA (Non-GAAP) | 3,016 | 335,647 | Average TCE Rates per Day (2021 vs. 2020) | Vessel Class (Voyage-charter) | 2021 | 2020 | | :--- | :--- | :--- | | Suezmax | $9,639 | $33,405 | | Aframax | $10,137 | $22,452 | | LR2 | $11,144 | $22,318 | - The tanker market outlook is positive for 2023, with the tanker orderbook-to-fleet ratio at **7.3%** as of January 2022, the lowest since 1996[341](index=341&type=chunk)[343](index=343&type=chunk) - The company recorded asset write-downs of **$92.4 million in 2021**, primarily due to impairments on seven tankers ($85.0 million) because of the weak near-term market outlook[335](index=335&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) Total consolidated liquidity decreased to $144.8 million at year-end 2021 from $372.6 million in 2020, driven by operating cash outflows and vessel repurchases Cash Flow Summary (2021 vs. 2020) | Cash Flow Activity (in thousands USD) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash flow (used for) provided by operating activities | (107,312) | 347,943 | | Net cash flow provided by (used for) financing activities | 21,951 | (416,104) | | Net cash flow provided by investing activities | 38,143 | 74,517 | - Total consolidated liquidity decreased by **$227.8 million**, from $372.6 million at Dec 31, 2020, to $144.8 million at Dec 31, 2021[372](index=372&type=chunk) Contractual Obligations as of December 31, 2021 | Obligation (in millions USD) | Total | 2022 | 2023 | 2024 | Beyond 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Debt Repayments & Maturities | 349.5 | 40.8 | 107.4 | 201.3 | — | | Finance Leases | 295.8 | 27.3 | 28.1 | 29.0 | 211.4 | | Operating Leases | 81.2 | 24.8 | 18.2 | 6.8 | 31.4 | | **Total** | **726.5** | **92.9** | **153.7** | **237.1** | **242.8** | [Critical Accounting Estimates](index=66&type=section&id=Critical%20Accounting%20Estimates) Vessel impairment is a critical accounting estimate, highly sensitive to assumptions about future charter rates and vessel values - Vessel impairment is a critical estimate; as of Dec 31, 2021, **35 vessels had an aggregate market value of $832.9 million**, which was below their aggregate carrying value of $1,139.8 million[392](index=392&type=chunk)[394](index=394&type=chunk) - The impairment analysis is highly sensitive to charter rate assumptions; a **10% reduction** in the long-term historical average spot rate assumption would have triggered an **$85.2 million impairment charge** for six vessels[395](index=395&type=chunk) - The company's recognized uncertain tax liabilities, primarily for freight taxes, totaled **$45.6 million** as of December 31, 2021[399](index=399&type=chunk) [Directors, Senior Management and Employees](index=71&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) The company's governance includes its Board, executive officers with shared roles at Teekay Corporation, and approximately 1,900 seagoing staff - The President & CEO, Kevin Mackay, and CFO, Stewart Andrade, also hold senior roles within **Teekay Corporation**, allocating their time between the two entities[414](index=414&type=chunk) - Non-employee directors receive an annual cash fee of **$60,000** and an annual equity award of **$75,000** (paid as restricted stock units or stock options)[429](index=429&type=chunk) - As of December 31, 2021, approximately **1,900 seagoing staff** served on the company's owned and leased vessels, with the majority covered by a Collective Bargaining Agreement[444](index=444&type=chunk)[445](index=445&type=chunk) [Major Shareholders and Related Party Transactions](index=76&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) Teekay Corporation is the controlling shareholder, and the company engages in significant related party transactions for various management services Teekay Corporation Share Ownership (as of March 1, 2022) | Share Class | Shares Owned | % of Class Owned | % of Total Stock Owned | Total Voting Power | | :--- | :--- | :--- | :--- | :--- | | Class A Common | 5,942,735 | 20.4% | 31.3% | 55.6% | | Class B Common | 4,625,997 | 100.0% | | | - The company operates under a long-term **Management Agreement** with a subsidiary of Teekay Corporation, for which it pays various fees for commercial, technical, administrative, and strategic services[471](index=471&type=chunk)[472](index=472&type=chunk)[474](index=474&type=chunk) - A business opportunities agreement allows **Teekay Corporation** and its affiliates to pursue opportunities in the tanker sector without an obligation to offer them to Teekay Tankers[457](index=457&type=chunk)[458](index=458&type=chunk) [Financial Information](index=80&type=section&id=Item%208.%20Financial%20Information) The company reports no material legal proceedings and maintains a discretionary dividend policy focused on balance sheet deleveraging - The company is not aware of any legal proceedings expected to have a **material adverse effect** on its financial condition[482](index=482&type=chunk) - In November 2019, the dividend policy was revised to be at the discretion of the Board of Directors, with a primary focus on **building net asset value through deleveraging**[483](index=483&type=chunk) [Additional Information](index=80&type=section&id=Item%2010.%20Additional%20Information) This section details the company's articles of incorporation, material contracts, and key U.S. federal income tax considerations for shareholders - For U.S. Holders, distributions are generally treated as dividends; qualified dividends may be taxed at preferential rates, provided the company is **not classified as a PFIC**[496](index=496&type=chunk) - If the company were treated as a PFIC, U.S. Holders would face adverse tax rules unless a timely **QEF or mark-to-market election** is made[501](index=501&type=chunk)[502](index=502&type=chunk)[505](index=505&type=chunk) - Under current Marshall Islands law, non-resident shareholders are **not subject to Marshall Islands tax** on dividends or capital gains from the company's common stock[518](index=518&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=85&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to market risks from foreign currency fluctuations, interest rate changes, and spot tanker market volatility - The company is exposed to interest rate risk through its floating-rate borrowings based on LIBOR or SOFR and uses **interest rate swaps** to mitigate this risk[523](index=523&type=chunk) Interest Rate Sensitive Financial Instruments (as of Dec 31, 2021) | Instrument (in millions USD) | Total Amount | Fair Value | Weighted-Avg. Rate | | :--- | :--- | :--- | :--- | | Short-term debt (Variable) | 25.0 | (25.0) | 3.6% | | Long-term debt (Variable) | 324.5 | (325.5) | 2.5% | | Finance Leases (Variable) | 137.2 | (137.2) | 3.0% | | Finance Leases (Fixed) | 158.6 | (169.2) | 6.3% | | Interest rate swap (Notional) | 50.0 | 0.6 | 0.8% (Fixed Pay Rate) | - The company is exposed to spot tanker market rate risk due to the cyclical nature of the industry and may use **forward freight agreements (FFAs)** to manage this exposure[529](index=529&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%2015.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective as of December 31, 2021 - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of December 31, 2021[534](index=534&type=chunk) - Management assessed the company's internal control over financial reporting and determined it was **effective as of December 31, 2021**, an assessment audited by KPMG LLP which issued an unqualified opinion[540](index=540&type=chunk)[541](index=541&type=chunk) PART III [Financial Statements](index=89&type=section&id=Item%2018.%20Financial%20Statements) This section contains the audited consolidated financial statements for the three-year period ended December 31, 2021, prepared under U.S. GAAP Consolidated Statement of (Loss) Income Highlights | (in thousands USD) | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Total revenues | 542,367 | 886,434 | 943,917 | | (Loss) income from operations | (194,095) | 141,573 | 123,883 | | Net (loss) income | (242,372) | 87,317 | 41,362 | | Diluted (loss) earnings per share | ($7.16) | $2.57 | $1.23 | Consolidated Balance Sheet Highlights (at year-end) | (in thousands USD) | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Total Assets | 1,618,749 | 1,840,245 | | Total Liabilities | 780,337 | 761,343 | | Total Equity | 838,412 | 1,078,902 | - The independent auditor, KPMG LLP, identified the **assessment of the recoverability of conventional tankers** as a critical audit matter due to the subjective judgment required to evaluate future charter rates[569](index=569&type=chunk)[571](index=571&type=chunk)

| --- | --- | |----------------------------------------------------------------------|-------------------| | | | | | | | Teekay Tankers Fourth Quarter and Annual 2021 Earnings Presentation | February 24, 2022 | Forward Looking Statement This presentation contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including, among other things, statements rega ...

Financial Data and Key Metrics Changes - Teekay Tankers reported an adjusted net loss of $25 million or $0.74 per share in Q4 2021, an improvement from an adjusted net loss of $50 million or $1.48 per share in the prior quarter [7] - For the full year 2021, the company had an adjusted net loss of $139 million or $4.09 per share, down from an adjusted net income of $153 million or $4.54 per share in 2020 [7] - The company maintained a pro forma liquidity of $246 million and a net debt to capitalization ratio of 41% at the end of 2021 [8] Business Line Data and Key Metrics Changes - Spot tanker rates improved in Q4 2021, reaching the highest point of the year, although they remained weak historically due to the Omicron variant and high bunker prices [9][12] - The company engaged in full-service lightering at an average rate of $22,200 per day in Q4 2021, supporting Aframax rates [9] - In Q1 2022, Suezmax and Aframax bookings averaged approximately $10,300 per day and $13,500 per day, respectively [16] Market Data and Key Metrics Changes - Global oil demand rebounded to 100 million barrels per day in Q4 2021, driven by increased mobility and economic activity [12] - Global oil production increased as OPEC+ unwound crude oil supply cuts at a rate of 400,000 barrels per day each month [13] - Oil prices reached a 7-year high of over $96 per barrel, leading to increased bunker fuel prices and pressure on tanker earnings [14] Company Strategy and Development Direction - The company plans to take advantage of the current high asset price environment for proactive fleet management, having sold three 2004-built vessels for approximately $42 million [11] - Teekay Tankers anticipates that tanker spot rates will recover from the lows seen in 2021 as oil demand and supply are expected to revert to and surpass pre-COVID levels [28] - The company expects low tanker fleet growth due to an aging fleet and a lack of new orders, which should support higher tanker utilization and improved spot rates in the coming years [27][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty in the near-term outlook but believes the building blocks for a tanker market recovery are in place [11] - The emergence of the Omicron variant could temporarily slow demand recovery, but it is not expected to derail the overall recovery scenario for 2022 [18] - Management expressed confidence that 2022 will be better than 2021, with expectations for continued improvement in 2023 and 2024 [76] Other Important Information - The company signed term sheets to refinance 13 vessels with low-cost sale leaseback financing, increasing liquidity by $75 million [8][32] - The company has proactively reduced its cost of debt, which is expected to decrease interest expenses by approximately $10 million in 2022 [34] Q&A Session Summary Question: Impact of Russia-Ukraine situation on ton miles and trade patterns - Management noted immediate reactions in the spot market with rates for Aframaxes in the Baltic reaching upwards of $150,000 a day, but it is too early to determine the full impact on ton miles and trade patterns [42][46] Question: Details on sold vessels and refinancing - The sold vessels were the Australian Spirit, Kaveri Spirit, and Axle Spirit, with gross proceeds from refinancing expected to be about $290 million, increasing liquidity by $75 million [48][49] Question: Future vessel sales and fleet positioning - Management indicated that while there are older vessels, there is no immediate need to sell more, and they will continue to analyze market conditions before making decisions [56][58] Question: Potential shift to lightering market - Management confirmed they are considering moving more ships into the lightering market due to increased volumes and favorable rates [64][66] Question: General impact of wars on supply and ton miles - Management stated that historical conflicts do not show a definite pattern, and each situation must be assessed based on its unique dynamics [70][72] Question: Timeframe for pricing recovery - Management expressed that while predicting exact timing is difficult, they believe 2022 will be better than 2021, with continued improvements expected in 2023 and 2024 [76][82]

| --- | --- | |---------------------------------------------------------|------------------| | | | | | | | Teekay Tankers Third Quarter 2021 Earnings Presentation | November 4, 2021 | Forward Looking Statement This presentation contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including, among other things, statements regarding: estimated impacts of ...

Financial Data and Key Metrics Changes - Teekay Tankers reported a negative adjusted EBITDA of $16 million in Q3 2021, down from negative $7 million in the previous quarter [6] - The adjusted net loss was $50 million or $1.48 per share, compared to a loss of $42 million or $1.23 per share in the prior quarter [6] - Pro forma liquidity stood at $209 million with a net debt to capitalization ratio of 39% at the end of Q3 2021 [7][23] Business Line Data and Key Metrics Changes - Spot tanker rates reached historic lows during Q3 2021, primarily due to OPEC+ supply cuts and unplanned outages in non-OPEC countries [10] - The company sold a 2003-built Aframax for approximately $12 million, taking advantage of relatively firm secondhand tanker prices [10] Market Data and Key Metrics Changes - Spot tanker rates improved modestly at the start of Q4 2021 due to higher trade volumes and easing non-OPEC outages [12] - The IEA projects an increase in global oil production of 2.7 million barrels per day by the end of the year, which is expected to boost tanker demand [13] Company Strategy and Development Direction - The company aims to maximize returns from its current fleet of 50 ships while preparing for a market recovery [30] - There is a focus on reducing emissions and developing new technologies as the older fleet is sold off [31] - The company plans to optimize vessel utilization by bringing forward drydocking schedules in anticipation of market recovery [16] Management's Comments on Operating Environment and Future Outlook - Management noted that while the timing of a significant market recovery remains uncertain due to COVID-19, key indicators are trending positively [9][20] - The company believes that the fundamentals are improving, with low tanker ordering and increased scrapping expected to limit future fleet growth [19][20] Other Important Information - The company completed refinancing of 8 vessels with lower-cost sale leaseback financings, reducing overall cost of capital [7][23] - The company has a manageable debt repayment profile with no significant maturities until 2024 [23] Q&A Session Summary Question: Future focus and operational leverage - Management emphasized the importance of weathering current market challenges while maximizing revenue generation as the market improves [30] Question: Potential risks to recovery - Management indicated that fleet supply is not expected to be a challenge, but overall demand could impact recovery [33] Question: Update on LR2 Aframax conversions - Management confirmed that four ships were converted to clean cargo trade with positive results, but future decisions will depend on market conditions [38] Question: OPEC guidance and run rate - Management explained that lower expenses related to crew changes and bulk purchasing contributed to a better-than-expected OPEC run rate [44] Question: Inventory drawdown levels - Management noted that current inventory levels are significantly below the five-year average, which could lead to oil price increases and a potential market shift [49][50] Question: Adding chartered vessels - Management expressed a willingness to add chartered vessels as market conditions improve, while currently maintaining a comfortable fleet size [52][54] Question: Seasonal strength in Q4 - Management acknowledged that while Q4 is typically stronger, the timing of market recovery can vary, but signs of tightening are evident [57]

| --- | --- | |----------------------------------------------------------|----------------| | | | | Teekay Tankers Second Quarter 2021 Earnings Presentation | August 5, 2021 | Forward Looking Statement This presentation contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including, among other things, statements regarding: the Company's plans to refin ...